Articles in Category: Metal Pricing

mine mining


Industrial metals have done rather well in bouncing back from the coronavirus pandemic lockdowns.

Classic fundamentals have been supported by rising sentiment to boost prices across the board. Mine supply has been constrained by governments forcing companies to close mine sites and refineries in a bid to contain the spread of the virus resulting in a hit to raw material and refined metal output in a number of countries.

Do you know the five best practices of sourcing metals, including aluminum?

According to Capital Economics, nickel, tin and zinc have been hit the most, each down 8% to 11% for the first three quarters of 2020 over 2019.

On the other side of the fundamentals, equation demand in top consumer China came roaring back during Q2 and Q3, fueled by infrastructure spending that is seeing positive PMI numbers across all sectors — consumption, retail, construction, manufacturing and exports.

GDP in China has recovered to finish the year above last, and there seems little sign that demand is likely to tail off anytime soon. While the rest of the world’s demand has been initially badly hit by lockdowns, it was maintained for electronics and PPE equipment, both dominated by Chinese manufacturers, which have more than made up for losses in more conventional areas.

Prospects for industrial metals next year

Will this buoyant backdrop persevere into 2021, consumers are asking themselves, should I be factoring in continually rising prices through next year?

Read more

There is a looming crisis in the nickel market.

Some would argue it’s a good problem to have. Demand is set to rise on the back of increasing uptake of electric and hybrid vehicles through this decade. More and more governments will mandate the production of electric vehicles (EVs) over internal combustion engine (ICE) autos. In parts of Europe, there will be outright bans on new ICE vehicles inside 10 years.

However, if nickel supply becomes constrained, consumers are going to pay the price.

Nickel market numbers

It should be said that today the problem barely registers as a price lever.

According to a recent McKinsey report, the stainless steel industry consumers 74% of nickel produced today, dwarfing the 5-8% going into batteries.

But the type of nickel required for battery production is what makes supply so sensitive in the future.

As the report explains, there are two types of nickel. Class 1 predominantly comes from the concentration, smelting and refining of sulfide ores. Meanwhile, Class 2 comes from ores, called saprolites and limonites, with higher iron and other (for batteries) levels of contaminants, such as copper.

So, whereas the stainless steel industry, to a large extent, can use a mix of Class 1 and Class 2, the battery industry draws its raw material from just Class 1, representing a more restricted 46% of the nickel supply market.

Worse, after the all the focus on the cobalt market — with its environmental, social, and corporate governance (ESG) concerns from countries like the Democratic Republic of the Congo — major consumers like Tesla are keen to establish long-term supply arrangements with nickel producers in sustainable locations with more robust ESG standards.

Read more

Maksym Yemelyanov/Adobe Stock

The Stainless Steel Monthly Metals Index (MMI) declined by three points this month to 67, following a five-point decline last month.

LME nickel prices continued to slide as global markets reacted to production delays due to coronavirus, which weakened demand and prices.

Read more

Bombardho/Adobe Stock

This morning in metals news, copper prices have been sliding amid growing fears over the spread of the coronavirus in China, laminated steel manufactured by Tata Steel in the Netherlands has been exempted from U.S. tariffs and China’s Jingye is reportedly considering building a new metals recycling furnace in the U.K.

Looking for metal price forecasting and data analysis in one easy-to-use platform? Inquire about MetalMiner Insights today!

Copper prices slide

Copper prices dropped for a ninth consecutive session Monday as fears mount over the spread of the coronavirus in China, Reuters reported.

Read more

Steven Husk/Adobe Stock

The Automotive Monthly Metals Index (MMI) fell one point this month for an August reading of 86.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

U.S. Auto Sales

Nissan reported July sales in the U.S. of 98,880 units, down 9.1% on a year-over-year basis.

Honda’s sales ticked up 1.9% to 141,296 units, with its car sales up 1.8% and truck sales up 2.1%.

Toyota Motor North America reported July sales were up 0.2% on a volume basis, but down 3.8% on a daily selling rate basis compared with July 2018.

Meanwhile, earlier this year Fiat Chrysler announced it would shift to quarterly sales reports, following other Detroit automakers General Motors and Ford Motor Company.

Fiat Chrysler did report its second-quarter financial results, reporting adjusted EBIT in North America of €1.57 billion, up €168 million from Q2 2018. Fiat Chrysler’s North American shipments fell 12% due to dealer stock reductions, according to the automaker.

“We continue to deliver strong performance in North America and LATAM. Robust demand for our new products, along with steps we’ve taken to exert discipline across all of our businesses, have generated the momentum to achieve our full-year 2019 guidance,” CEO Mike Manley said in a prepared statement.

General Motors announced Q2 2019 income of $2.4 billion, up 1.6% on a year-over-year basis. In addition, this week GM announced it would open a $65 million parts processing facility in Burton, Michigan, a suburb of Flint. According to GM, the facility will employ more than 800 hourly and salaried workers.

In this month’s J.D. Power and LMC Automotive forecast, July new-vehicle retails sales in the U.S. were expected to fall compared with July 2018. Meanwhile, total sales were forecast to fall 1.8% compared with July 2018.

The seasonally adjusted annualized rate for total sales was forecast to reach 16.7 million units this year, which would come in approximately flat compared with 2017, according to J.D. Power and LMC Automotive.

“July will be another month of modest sales declines—but with high vehicle expenditures—as the average new vehicle sales price exceeds $33,000, up over $1,400 from July 2018,” said Thomas King, senior vice president of J.D. Power’s data and analytics division.

According to J.D. Power, the rise in prices is being driven by “consumers paying more for recently launched SUVs and more attractive interest rates on new vehicles that help keep monthly payments affordable when purchasing more expensive vehicles.”

The Sales Climate in China

Recently, MetalMiner’s Stuart Burns weighed in on the challenges automakers are facing in China, the world’s largest automotive market.

As Burns explained, some foreign automakers are operating at remarkably low percentages of capacity in China.

“The Financial Times reported Ford’s plants in China operated at only 11% of capacity during the first six months of this year, as the firm’s car sales plunged to 27% of the same period last year,” Burns explained.

“Meanwhile, Peugeot owners PSA’s plant in Chang’an produced just 102 cars — yes, you read that right, 102 cars — in the first half of the year, meaning its capacity utilization was below 1%. The firm’s other joint venture with Dongfeng Auto ran at just 22% of capacity, the article reported, as sales were just 62% of the same H1 period last year.”

On the other hand, Japanese automakers and premium European brands have fared well, Burns noted.

“Japanese carmakers, for example, remain strong,” Burns wrote. “Honda and Toyota are both running extra shifts to maintain better than 100% capacity. Premium European brands are doing well, with Daimler’s Beijing Benz joint venture running close to 90% capacity while BMW Brilliance is running at 96%. If it were just the sale of low-end cars that were suffering, you would expect the Japanese carmakers and Volkswagen to also see a similarly sharp downturn, but they are not.”

Actual Metal Prices and Trends

U.S. HDG rose 4.4% month over month to $813/st as of Aug. 1. LME three-month copper fell 0.5% to $5,950/mt.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

U.S. shredded scrap steel fell 6.2% to $257/st. Korean 5052 aluminum coil premium fell 3.7% to $3.15/kg.

Charles/Adobe Stock

This morning in metals news, U.S. copper deposits are garnering investment from electric vehicle (EV) industry players, London copper rose Friday and the E.U. mulls retaliation if the U.S. imposes tariffs on automobiles.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Copper Investment

The copper price struggled through the final quarter of 2018, but according to a Reuters report the metal could be getting a boost in demand from the EV sector.

According to the report, U.S. copper deposits have received $1.1 billion in investments from miners looking to fill demand from EV makers.

LME Copper Rises

Sticking with the metal, the London copper price moved up Friday but was set to take a weekly loss, according to Reuters.

The projected 1.6% weekly drop would mark the biggest weekly decline since late December, according to the report.

Back and Forth

Last August, the U.S. Department of Commerce launched a Section 232 probe investigating whether imports of automobiles and automotive parts pose a national security threat.

While the Commerce Department has yet to take action — the first step being the submission of a report and recommendations to President Donald Trump — the E.U. has promised to respond if the U.S. opts to impose tariffs.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

According to a report by Fortune, the E.U. this week said it is prepared to impose $23 billion in tariffs on U.S. goods if the U.S. imposes tariffs on automobiles.

The Commerce Department launched the Section 232 automotive probe May 23, 2018. Pursuant to Section 232 of the Trade Expansion Act of 1962, the secretary of commerce must present the president with a report, including recommendations, within 270 days of the initiation of the probe (making for a late February deadline in this case).

Section 232 produced the Trump administration’s tariffs on imported steel and aluminum (25% and 10%, respectively). Prior to the Trump administration, Section 232 was last invoked under President George W. Bush in a 2001 probe that investigated the impact of imports of iron ore and semi-finished steel.

Even if U.S. steelmakers have been slow to add capacity following President Trump’s tariff protection, it would seem foreign steel makers are willing to commit to domestic U.S. production.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

The Financial Times this week reported on the announcement by BlueScope Steel, Australia’s biggest steelmaker, to examine adding 600,000 to 900,000 metric tons per year of steelmaking capacity to its North Star business in Ohio. This would raise the Ohio plant’s existing production of 2.1 million metric tons per year to some 3 million tons at a cost of between U.S. $500 million and $700 million.

The project would involve the addition of a third electric arc furnace and a second slab caster, according to the Financial Times report. A decision is expected at the company’s February 2019 annual results pending the outcome of the feasibility study, by which time a clearer picture may emerge of what the tariff landscape is going to look like longer term.

Interestingly, Australian steelmakers are exempted from the tariffs; in theory, BlueScope could have invested at home. Australia, however, along with Argentina, are subject to quota limits, so ramping up domestic production to meet U.S. demand is not considered a viable option.

According to the Financial Times, domestic U.S. steel producers are, not surprisingly, doing rather well from the tariffs.

The resulting price rises have fueled a rally in U.S. domestic prices, helping firms like ArcelorMittal surpass forecasts previously set by analysts. Arcelor’s earnings came in at $5.59 billion before interest, taxes, depreciation and amortization for H1 2018. That represented an increase of 28.6% on the same period a year before, as half-year sales rose 17.6% year-on-year in value terms to $39.2 billion, primarily due to higher steel selling prices. Net income was up by almost one-third to $3.06 billion. It hasn’t yet resulted in Arcelor announcing any increased investment in domestic U.S. production capacity — the real aim of the tariffs — but, arguably, steelmakers are waiting to see how the whole tariff situation develops and whether they are truly here to stay (in which case, investment could result).

The U.S. Department of Commerce found foreign steel accounted for about one-third of the 107 million metric tons of steel the U.S. economy used in 2017, the Weekly Standard reported.

Although U.S. producers still have a commanding market share, the report concluded that inexpensive foreign imports were causing domestic steelmakers to lose money, lay off workers, and close plants last year.

U.S. steel plants in 2017 ran at just 72% of capacity, below the 80% level they are widely considered necessary to be profitable. The blame for poor capacity utilization fell firmly at the door of “excessive imports of steel.”

Well, that was last year; this year is something very different.

Following tariffs, steel prices are up sharply, profits are up at the domestic mills and so is capacity utilization. The domestic mills have the option to price balance towards full capacity, shielded as they are now behind a 25% import tariff. They may choose to take higher prices and forego full capacity or adjust pricing to achieve full capacity; we will see what policy has been adopted when Q3 and H2 figures are released.

It is unlikely significant new capacity will be added in the short term, though, despite talk of planned new capacity.

Want to see an Aluminum Price forecast? Take a free trial!

According to Reuters, steel output in the United States rose 2.9% in the first half to 41.9 million metric tons and gained 0.8% in June to hit 6.9 million tons for the month. Data from the American Iron and Steel Institute (AISI) show capacity utilization at U.S. mills in the year to July was 76.4%, up from 74.4% in 2017, suggesting domestic mills generally are opting for better prices as a route to profitability rather than pricing out tariffed imports.

The Renewables Monthly Metals Index (MMI) dropped three points for an August MMI reading of 105.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

BHP Getting Into Cobalt

Miner BHP Billiton has plans to ramp up its production of a cobalt product used in electric vehicle (EV) batteries, Bloomberg reported.

Per the report, the miner has had success in producing cobalt sulphate alongside its nickel product at its Western Australia operation, according to an interview with Asset President Eduard Haegel.

Questions about cobalt supply and price volatility persist, but a miner of the size of BHP looking to expand its presence in the sphere is an indicator of the metal’s importance and, thus, the level to which the EV market is coveted.

Speaking of Cobalt Prices…

The price of the coveted metal has come off a bit of late, but that might just be a short-term blip.

According to the Toronto-based Sherritt International Corp — a miner with operations in Cuba, Madagascar and Canada — the softening of cobalt prices should reverse as demand continues to pick up, particularly vis-a-vis the growing EV sector, Reuters reported.

Plate Prices

According to a report in the Hellenic Shipping News, shipbuilders in South Korea are asking steelmakers to freeze shipbuilding plate prices.

According to the report, the Korea Offshore & Shipbuilding Association is asking for the freeze because price hikes threaten their survival, as declining orders and increased competition from China have weighed on the Korean shipbuilding sector.

Thick steel plate prices jumped $44/ton in the first half of the year, according to the report.

Actual Metals Prices and Trends

Japanese steel plate fell 1.0% month over month to $715.62/mt. Korean steel plate rose 1.6% to $682.89/mt. Chinese steel plate fell 4.4% to $707.51/mt.

U.S. steel plate jumped 5.2% to $986/st.

Benchmark your current cold rolled coil sheet prices and see how it compares to the market

Chinese neodymium fell 4.0% to $60,182/mt. Chinese silicon fell 2.8% to $1,511.89/mt. Chinese cobalt cathodes fell 2.8% to $97,612.20/mt.

Zerophoto/Adobe Stock

This morning in metals, a Chinese province announced new capacity cut targets as part of the country’s overall environmental plans, copper supply-side issues and Vedanta’s quarterly earnings rise.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

Plans to Cut Steel, Coal Capacity

China’s Shandong province has new targets for cuts on steel and coal production, Reuters reported.

The plans include cuts to pig iron production capacity of 600,000 tons and crude steel of 3.55 million tons by the end of this year, according to the report.

Copper Supply-Side Issues

The copper price has been in a downtrend of late. While it remains to be seen if the downtrend will become a long-term slide, copper watchers are also paying attention to supply-side issues at Freeport-McMoRan’s Grasberg mine in Indonesia.

According to Bloomberg, the mine will see production cut by 300,000 metric tons next year as the miner transitions open pits to underground operations.

Vedanta Earnings Up

Indian miner Vedanta Resources reported a rise in quarterly earnings, Reuters reported.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

For the three-month period ending June 30, the miner reported EBITDA of $983 million, up from $778 million for the same period in 2017, according to the report.

Source: Laurentiu Lordache/Adobe Stock

Not long ago, we mentioned that copper prices had been plunging of late — but the so-called “Dr. Copper” isn’t the only one on hard times.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

Zinc has also been trending down this year. LME primary cash zinc opened the calendar year at $3,288/mt, but was down to $2,895/mt as of Wednesday, June 27 according to MetalMiner IndX data, good for a 12% decline through the nearly halfway point of the year.

Still, the zinc price remains in a long-term uptrend that dates back to December 2015.

The LME zinc price has dropped 12% so far this year, but is still in a long-term uptrend. Source: LME

A Global Surplus in Q1

First, we must look at basic supply and demand. According to the International Lead and Zinc Study Group (ILZSG), the global refined zinc market boasted a 25 kt surplus in Q1 2018. In addition, reported inventories rose by 118 kt in Q1.

Zinc mine production, however, barely budged in Q1 compared with Q1 2017. In Q1 of this year, mine production was 3,086,000 tons, compared with 3,082,000 tons in Q1 2017.

Meanwhile, refined zinc metal production globally jumped 1.7% year over year in Q1 2018, as production in Australia, Belgium, China, Norway and Peru helped cancel out decreases in India and China, according to ILSZG.

As for actual usage, that only increased by 0.4%, driven by demand from China and India, according to the report.

U.S. Dollar

The U.S. dollar correlates inversely with zinc, as it does with other base metals.

As such, it’s important to note the firming of the U.S. dollar over the past few months. The index is up 5.74% compared with three months ago, according to MarketWatch data.

Chinese Smelter Cut Gives Price a Boost

The zinc price did get a boost on Thursday, June 27, as Chinese smelters plan to cut production by 10% on account of low prices, according to a Reuters report.

For more efficient carbon steel buying strategies, take a free trial of MetalMiner’s Monthly Outlook!

The LME zinc price moved up 0.8% on Thursday, moving off of a 10-month low, according to the report.

1 2 3 44